DEPARTMENT OF THE TREASURY Internal
Revenue Service 26 CFR part 1

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Final regulations.

SUMMARY:

This document contains the final regulations relating to the
return and information statement requirements under section 6039 of
the Internal Revenue Code (Code). These regulations reflect changes
to section 6039 made by section 403 of the Tax Relief and Health Care
Act of 2006. These regulations affect corporations that issue statutory
stock options and provide guidance to assist corporations in complying
with the return and information statement requirements under section
6039.

DATES:

Effective Date: These regulations are effective
on November 17, 2009.

Applicability Date: For dates of applicability, see §§1.6039-1(f) and 1.6039-2(e).

FOR FURTHER INFORMATION CONTACT:

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The collection of information contained in these regulations
has been reviewed and approved by the Office
of Management and Budget in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507 (d)) under control number 1545-2129.
Responses to this collection of information are required to assist
taxpayers with the completion of their income tax returns for the
taxable year in which a disposition of stock acquired under a statutory
option occurs.

An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless the collection of
information displays a valid control number assigned by the Office
of Management and Budget.

Books or records relating to a collection of information must
be retained as long as their contents may become material in the administration
of any internal revenue law. Generally, tax returns and tax return
information are confidential, as required by 26 U.S.C. 6103.

Background

Section 403 of the Tax Relief and Health Care Act of 2006 (Act)
amended the information reporting requirements of section 6039. Prior
to its amendment, section 6039 required corporations to furnish a
written statement to each employee, in a manner prescribed by the
Secretary in the regulations, regarding: (i) the corporation’s
transfer of stock pursuant to the employee’s exercise of an
incentive stock option described in section 422(b); and (ii) the transfer
of stock by the employee where the stock was acquired pursuant to
the exercise of an option described in section 423(c). Corporations
must furnish employees with the information statements required by
section 6039 on or before January 31 of the year following the year
for which the statement is required. Prior to the amendment of section
6039 made by the Act, the regulations under section 6039 were last
updated in 2004. See T.D. 9144, 2004-2 C.B. 413 (69 FR 46401).

As amended by the Act, section 6039 requires corporations to
file an information return with the IRS, in addition to providing
employees with an information statement, following a stock transfer.
Section 6039, as amended by the Act, applies to stock transfers occurring
on or after January 1, 2007. However, in Notice 2008-8, 2008-3 I.R.B.
276 (December 19, 2007) (see §601.601(d)(2)(ii)(b)), the IRS waived the obligation to file an information return for
2007 stock transfers governed by section 6039.

On July 17, 2008, the Department of Treasury published a notice
of proposed rulemaking (REG-103146-08, 2008-37 I.R.B. 701) in the Federal Register (73 FR 40999) under section
6039. In addition to describing the return and information reporting
requirements pursuant to section 6039, the notice of proposed rulemaking
waived the obligation to file an information return for 2008 stock
transfers governed by section 6039. A public hearing on the proposed
regulations was held on October 30, 2008. Written and electronic
comments responding to the notice of proposed rulemaking were received.
After consideration of these comments, the Department of Treasury
adopts the proposed regulations as final regulations, with the modifications
set forth in this Treasury decision. The significant revisions are
discussed in this preamble.

Explanation of Provisions

1. Overview

These final regulations describe the information that is required
in the return filed with the IRS and the information statement furnished
to employees pursuant to section 6039. There are two sections under
these final regulations: §1.6039-1, Returns required in connection
with certain options; and §1.6039-2, Statements to persons with
respect to whom information is reported. A principal objective of
these final regulations is to require corporations to furnish employees
with sufficient information to enable them to calculate their tax
obligations upon disposition of the shares acquired by the exercise
of a statutory option. As discussed further in this preamble, the
IRS will issue two forms (with accompanying instructions) that corporations
must use to satisfy the return and information statement requirements
under section 6039.

Comments received in response to the proposed regulations were
generally favorable. Commenters observed that the proposed regulations
improved the existing regulations by requiring corporations to provide
additional information useful to employees for purposes of computing
tax liability with respect to the disposition of shares acquired pursuant
to the exercise of a statutory option. These final regulations are
generally similar to the proposed regulations with the modifications
described below in response to the comments submitted by taxpayers.

With respect to the transfer of stock pursuant to the exercise
of an incentive stock option, the information required in the return
and the information statement pursuant to §1.6039-1(a) and §1.6039-2(a)
of these final regulations is the same information that is required
pursuant to the proposed regulations.

a. Transfers of legal title for stock acquired under
an employee stock purchase plan

Section 6039(a)(2) requires every corporation which records
(or has by its agent recorded) a transfer of the legal title of a
share of stock acquired by the employee where the stock was acquired
pursuant to the exercise of an option described in section 423(c)
to file a return with respect to each transfer made during a particular
year. Section 6039(c)(2) provides that the return under section 6039(a)(2)
is required only with respect to the first transfer of such stock
by the person who exercised the option. Section 6039(b) requires
every corporation filing a return under section 6039(a)(2) to furnish
to each employee named in such return a written statement with respect
to the transfer or transfers made by the employee during a particular
year.

Several commenters noted that it has become common practice
for employers to maintain a system in which shares acquired by employees
under an employee stock purchase plan are deposited directly into
a brokerage account established on behalf of the employee. In the
typical arrangement, a contractual agreement exists with a recognized
broker or financial institution, and employees who elect to participate
in the employee stock purchase plan direct that all shares acquired
upon the exercise of the option be immediately deposited into a brokerage
account established on behalf of the employee. The legal title of
the shares deposited into the brokerage account is typically held
by another entity acting as a securities depository, which holds the
shares in the street name of the broker. The employee has a beneficial
interest in the shares, but the securities depository holds legal
title of the shares.

The final regulations modify §1.6039-1(b)(3) of the proposed
regulations to provide that a transfer of legal title to a recognized
broker or financial institution immediately following the exercise
of an option is treated as the first transfer of legal title for purposes
of the section 6039(a)(2) filing requirement. Accordingly, if an
employer operates an employee stock purchase plan pursuant to which
shares acquired upon exercise of the option will be immediately deposited
into a brokerage account established on behalf of the employee, then
the deposit of shares by the employee into the brokerage account following
the exercise of the option is the first transfer of legal title of
the shares acquired by the employee and the corporation is only required
to file a return relating to such transfer of legal title.

For employees whose shares are immediately deposited into a
brokerage account following the exercise of an option, the exercise
of the option and the first transfer of legal title occur on the same
date. In such a case, the dates to be provided under §§1.6039-1(b)(1)(vii)
(the date the option was exercised) and (ix) (the date legal title
was first transferred) will be the same.

If, instead of establishing a brokerage arrangement, an employer
either issues a stock certificate directly to an employee who purchases
stock pursuant to an employee stock purchase plan, or registers the
shares in the employee’s name on the employer’s record
books and the employer or its transfer agent holds the shares for
the employee in book-entry form, then, for purposes of section 6039(a)(2)
and (c)(2), the issuance of the stock certificate or the registration
of the stock ownership on the record books is not considered the first
transfer of legal title of the stock acquired by the employee. Accordingly,
the employer is not required to file a return and furnish an information
statement to the employee (pursuant to section 6039(a)(2) and (b))
with respect to such transfer of the stock to the employee. Instead,
the employer is required to file a return and furnish an information
statement to the employee with respect to the first transfer of the
legal title of the stock acquired by the employee (for example, when
the employee sells the stock or transfers the stock to a brokerage
account established on behalf of the employee). Consequently, if
a stock certificate is issued or the ownership of the shares is registered
on the employer’s record books following the exercise of an
option, the exercise of the option and the first transfer of legal
title occur on different dates, unless the shares are immediately
sold or otherwise transferred. Accordingly, in such a case, the dates
to be provided under §§1.6039-1(b)(1)(vii) (the date the
option was exercised) and (ix) (the date legal title was first transferred)
will be different.

b. Reporting of information with respect to the special
tax rule under section 423(c)

Acknowledging that one of the primary purposes of these regulations
is to provide information to employees for purposes of computing their
tax liability with respect to the disposition of shares acquired pursuant
to statutory options, commenters suggested that the return and information
statement provided with respect to options granted under an employee
stock purchase plan contain additional information necessary to calculate
the tax liability in the case of a qualifying disposition of the stock.
Under section 423(a), a qualifying disposition occurs if the stock
acquired under an employee stock purchase plan is disposed of no earlier
than two years after the date of grant of the option and one year
after the date of exercise of the option.

Section 423(c) provides a special rule for calculating the timing
and amount of compensation income that must be recognized in the event
of a qualifying disposition when the exercise price is less than 100
percent of the value of a share on the date of grant. Generally,
the compensation income recognized is the lesser of: (a) the excess
of the fair market value of the share on the date of grant over the
exercise price, and (b) the excess of the fair market value of a share
at the time of disposition (or death) over the price paid per share.
The flush language of section 423(c) provides that if the exercise
price is not known on the date of grant, the exercise price shall
be determined as if the option were exercised on the date of grant.

There are various circumstances under which the exercise price
will not be known on the date of grant. For example, the exercise
price will not be known on the date of grant if the exercise price
is equal to the lesser of 85 percent of the fair market value of the
stock on the date of grant or 85 percent of the fair market value
of the stock on the date of exercise. In addition, the exercise price
will not be known on the date of grant if the exercise price is calculated
based on a certain percentage (not less than 85 percent) of the fair
market value of the stock on the date of exercise. In order to compute
the tax liability resulting from a qualifying disposition of the stock
acquired using either of the foregoing pricing formulas, the employee
needs to know the exercise price determined as if the option were
exercised on the date of grant of the option.

In response to the comments, these final regulations modify
the proposed regulations by adding §1.6039-1(b)(vi) to these
final regulations. If the exercise price per share of an option is
not fixed or determinable on the date the option was granted to the
employee, §1.6039-1(b)(vi) of these final regulations requires
corporations to include in the return and information statement the
exercise price per share determined as if the option were exercised
on the date of grant.

c. Requirement of return and information statement
under section 6039(a)(2) and (b)

Commenters asked for clarification regarding whether the return
and information statement requirements of section 6039(a)(2) and (b)
apply only to the transfer of shares pursuant to a qualifying disposition.
Section 6039(a)(2) requires that an information return be filed by
every corporation which in any calendar year records (or has by its
agent recorded) a transfer of the legal title of a share of stock
acquired by the transferor pursuant to his or her exercise of an option
described in section 423(c). The IRS and the Treasury Department
have concluded that the reference in section 6039(a)(2) to an option
described in section 423(c) relates to the exercise price of the option
(as evidenced by the parenthetical phrase in section 6039(a)(2) following
the reference to section 423(c)) rather than whether or not the shares
are disposed of in a qualifying disposition as also described in section
423(c). Furthermore, section 6039(c)(2) provides that the return
and information statement requirements of section 6039(a)(2) and (b)
are triggered by the first transfer of the legal title of the shares.
This provision would be unnecessary if section 6039(a)(2) only applied
to qualifying dispositions. Therefore, these final regulations provide
that the return and information statement requirements are not dependent
upon whether such transfer of legal title is a qualifying or disqualifying
disposition.

Commenters also asked for clarification regarding whether the
return and information statement requirements of section 6039(a)(2)
and (b) only apply to the transfer of shares acquired pursuant to
an option described in section 423(c) where the exercise price is
less than 100 percent of the value of a share on the date of grant.
These final regulations provide that the return and information statement
requirements of section 6039(a)(2) and (b) also apply to the transfer
of shares acquired pursuant to an option where the exercise price
is not fixed or determinable on the date of grant, as well as to the
transfer of shares acquired pursuant to an option described in section
423(c) where the exercise price is less than 100 percent of the value
of a share on the date of grant.

4. Nonresident aliens

Several commenters suggested that the return and information
statement requirements of section 6039 should not apply to nonresident
aliens (as defined in section 7701(b)) who perform services outside
the United States. These commenters point out that the reported information
may not be useful to nonresident aliens because they likely will not
have any U.S. tax liability.

In response to comments, these final regulations modify the
proposed regulations by adding §1.6039-1(e) which provides an
exception to the return requirements of section 6039(a) for certain
nonresident aliens. With respect to incentive stock options, the
return requirement of section 6039(a)(1) is not applicable to the
exercise of an incentive stock option by an employee who is a nonresident
alien and to whom the corporation is not required to provide a Form
W-2, Wage and Tax Statement (or its designated
successor) for any calendar year within the time period beginning
with the first day of the calendar year in which the option was granted
to the employee and ending on the last day of the calendar year in
which the employee exercised the incentive stock option. With respect
to employee stock purchase plans, the return requirement of section
6039(a)(2) is not applicable to the first transfer of legal title
of a share of stock by an employee who is a nonresident alien and
to whom the corporation is not required to provide a Form W-2 for
any calendar year within the time period beginning with the first
day of the calendar year in which the option was granted to the employee
and ending on the last day of the calendar year in which the employee
first transferred legal title to shares acquired under the option.
For purposes of §1.6039-1(e) of these final regulations, the
term corporation is defined in section 7701(a)
and includes, but is not limited to, the corporation issuing the stock,
a related corporation of the corporation, any agent of the corporation,
any party distributing shares of stock or other payments in connection
with the plan (for example, a brokerage firm), and any party in control
of the payment of remuneration for employment to the employee.

5. Forms to satisfy the return and information statement
requirements

Returns required by §1.6039-1(a) of these final regulations
and information statements required by §1.6039-2(a) of these
final regulations must be made using Form 3921, Exercise
of an Incentive Stock Option Under Section 422(b) (or its
designated successor) and filed in the manner provided in the instructions
thereto. Returns required by §1.6039-1(b) of these final regulations
and information statements required by §1.6039-2(b) of these
final regulations must be made using Form 3922, Transfer
of Stock Acquired Through an Employee Stock Purchase Plan Under Section
423(c) (or its designated successor) and filed in the manner
provided in the instructions thereto. Section 1.6039-1(c) of the
proposed regulations provided that Forms 3921 and 3922 must be filed
on or before January 31 of the year following the year for which the
return and statement are required. Section 1.6039-1(c) of these final
regulations has been revised to provide that Forms 3921 and 3922 must
be filed in accordance with the guidelines and procedures set forth
in the instructions to Forms 3921 and 3922. The IRS expects to release
Forms 3921 and 3922 in the near future.

Several commenters suggested that taxpayers be allowed to satisfy
the information statement requirements of §1.6039-2(a) and (b)
of these final regulations by delivering a substitute form that includes
all of the information required to be included on the Forms 3921 or
3922, as applicable. Taxpayers may satisfy the return requirements
of §1.6039-1(a) and (b) as well as the information statement
requirements of §1.6039-2(a) and (b) by submitting substitute
Forms 3921 and 3922 in accordance with the guidelines set forth in
Publication 1179 (or its designated successor). For example, it would
be permissible for a taxpayer to satisfy the return requirements of
§1.6039-1(a) and (b) by submitting Forms 3921 and 3922 to the
IRS, and satisfy the information statement requirements of §1.6039-2(a)
and (b) by delivering substitute Forms 3921 and 3922 to the appropriate
recipients in accordance with the guidelines set forth in Publication
1179 (or its designated successor).

Effective/Applicability Date

These final regulations will apply as of January 1, 2007. However,
taxpayers are not required to comply with the return requirements
of §1.6039-1(a) and (b) of these final regulations for stock
transfers that occur during the 2007, 2008 and 2009 calendar years.
Notwithstanding the waiver of the return requirements for 2007, 2008
and 2009 stock transfers, taxpayers must furnish information statements
to employees for such stock transfers. For purposes of furnishing
information statements for stock transfers that occur during the 2007
or 2008 calendar years, taxpayers may rely on §1.6039-1 of the
2004 final regulations ((69 FR 46401) or §1.6039-2 of the 2008
proposed regulations (REG-103146-08)) (73 FR 40999). For purposes
of furnishing information statements for stock transfers that occur
during the 2009 calendar year, taxpayers may rely on §1.6039-1
of the 2004 final regulations (69 FR 46401), §1.6039-2 of the
2008 proposed regulations (REG-103146-08) (73 FR 40999), or these
final regulations.

Special Analyses

It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It is hereby
certified that the regulations will not have a significant economic
impact on a substantial number of small entities. This certification
is based on the fact that the filing of a return with the IRS and
the provision of employee statements required under this Treasury
decision will impose a minimal administrative burden on small entities.
It is estimated that it will take approximately 30 minutes to prepare
and provide the information required by these regulations. Further,
the information to be provided is readily available. Therefore, an
analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6)
is not required. Pursuant to section 7805(f) of the Internal Revenue
Code, the notice of proposed rulemaking that preceded these regulations
was submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.

Adoption of Amendments to the Regulations

Accordingly, 26 CFR part 1 is amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to
read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. Section 1.6039-1 is revised to read as follows:

§1.6039-1 Returns required in connection with
certain options.

(a) Requirement of return with respect to incentive
stock options under section 6039(a)(1). (1) Every corporation
which in any calendar year transfers to any person a share of stock
pursuant to such person’s exercise of an incentive stock option
shall, for such calendar year, file a return with respect to each
transfer made during such year. This return must include the following
information—

(i) The name, address, and employer identification number of
the corporation transferring the stock;

(ii) If other than the corporation identified in paragraph (a)(1)(i)
of this section, the name, address and employer identification number
of the corporation whose stock is being transferred;

(iii) The name, address, and identifying number of the person
to whom the share or shares of stock were transferred pursuant to
the exercise of the option;

(iv) The date the option was granted to the person;

(v) The exercise price per share;

(vi) The date the option was exercised by the person;

(vii) The fair market value of a share of stock on the date
the option was exercised by the person; and

(viii) The number of shares of stock transferred to the person
pursuant to the exercise of the option.

(2) Each return required by this paragraph (a) shall be made
on Form 3921, Exercise of an Incentive Stock Option Under
Section 422(b) (or its designated successor) and shall
be filed in such manner as provided in the instructions thereto.

(b) Requirement of return with respect to stock purchased
under an employee stock purchase plan under section 6039(a)(2). (1) Every corporation which in any calendar year records, or has
by its agent recorded, a transfer of the legal title of a share of
stock acquired by the transferor (person who acquires the shares pursuant
to the exercise of the option) pursuant to the transferor’s
exercise of an option granted under an employee stock purchase plan
as described in section 423(c) and where the exercise price is less
than 100 percent of the value of the stock on date of grant or is
not fixed or determinable on the date of the grant, shall, for such
calendar year, file a return with respect each transfer made during
such year. This return must include the following information—

(i) The name, address, and identifying number of the transferor;

(ii) The name, address and employer identification number of
the corporation whose stock is being transferred;

(iii) The date the option was granted to the transferor;

(iv) The fair market value of the stock on the date the option
was granted;

(v) The actual exercise price paid per share;

(vi) The exercise price per share determined as if the option
were exercised on the date the option was granted to the transferor
(to be provided only if the exercise price per share is not fixed
or determinable on the date the option was granted);

(vii) The date the option was exercised by the transferor;

(viii) The fair market value of the stock on the date the option
was exercised by the transferor;

(ix) The date the legal title of the shares was transferred
by the transferor (see paragraph (b)(3) of this section); and

(x) The number of shares to which legal title was transferred
by the transferor.

(2) Each return required by this paragraph (b) shall be made
on Form 3922, Transfer of Stock Acquired Through an Employee
Stock Purchase Plan Under Section 423(c) (or its designated
successor) and shall be filed in such manner as provided in the instructions
thereto.

(3) A return is required by reason of a transfer described in
section 6039(a)(2) only with respect to the first transfer of legal
title of the shares by the transferor, including the first transfer
of legal title to a recognized broker or financial institution. If
a contractual agreement exists or is entered into with a recognized
broker or financial institution pursuant to which shares acquired
upon exercise of the option will be immediately deposited into a brokerage
account established on behalf of the transferor, then the deposit
of shares by the transferor into the brokerage account following the
exercise of the option is the first transfer of legal title of the
shares acquired by the transferor, and the corporation is only required
to file a return relating to such transfer of legal title.

(4) Every corporation that transfers any share of stock pursuant
to the exercise of an option described in this paragraph shall identify
such stock in a manner sufficient to enable the accurate reporting
of the transfer of legal title to such shares. Such identification
may be accomplished by assigning to the certificates of stock issued
pursuant to the exercise of such options a special serial number or
color.

(c) Time for filing returns. Each return
required by this section for a calendar year must be filed in accordance
with the guidelines and procedures set forth in the instructions to
Form 3921 and Form 3922.

(d) Penalty. For provisions relating to
the penalty applicable to the failure to file a return under this
section, see section 6721.

(e) Exception to return requirements of section 6039(a)
for certain nonresident aliens— (1) Return
requirement under section 6039(a)(1). The return requirement
of section 6039(a)(1) is not applicable to the exercise of an incentive
stock option by an employee who is a nonresident alien (as defined
in section 7701(b)) and to whom the corporation is not required to
provide a Form W-2, Wage and Tax Statement (or
its designated successor) for any calendar year within the time period
beginning with the first day of the calendar year in which the option
was granted to the employee and ending on the last day of the calendar
year in which the employee exercised the option.

(2) Return requirement under section 6039(a)(2). The return requirement of section 6039(a)(2) is not applicable to
the first transfer of legal title of a share of stock by an employee
who is a nonresident alien (as defined in section 7701(b)) and to
whom the corporation is not required to provide a Form W-2 for any
calendar year within the time period beginning with the first day
of the calendar year in which the option was granted to the employee
and ending on the last day of the calendar year in which the employee
first transferred legal title to shares acquired under the option
as described in paragraph (b)(3) of this section.

(3) For purposes of this paragraph (e), the term corporation is defined in section 7701(a) and includes, but is not limited to,
the corporation issuing the stock, a related corporation of the corporation,
any agent of the corporation, any party distributing shares of stock
or other payments in connection with the plan (for example, a brokerage
firm), and any party in control of the payment of remuneration for
employment to the employee.

(f) Effective/applicability date—(1) In general. This section is effective on November 17,
2009. This section will apply as of January 1, 2007.

(2) Transition period. Taxpayers are not
required to comply with the return requirements of paragraphs (a)
and (b) of this section for stock transfers that occur during the
2007, 2008 and 2009 calendar years.

Par. 3. A new §1.6039-2 is added to read as follows:

§1.6039-2 Statements to persons with respect
to whom information is reported.

(a) Requirement of statement with respect to incentive
stock options under section 6039(b). (1) Every corporation
filing a return under §1.6039-1(a) shall furnish to each person
whose name is set forth in such return a written statement with respect
to the transfer or transfers made to such person during such year.
This statement must include the information described in §1.6039-1(a)(1).

(2) Each statement required by this paragraph (a) to be furnished
to any person must be furnished to such person on Form 3921, Exercise of an Incentive Stock Option Under Section 422(b) (or its designated successor) and be delivered at such time and
in such manner as provided in the instructions thereto.

(b) Requirement of statement with respect to stock
purchased under an employee stock purchase plan under section 6039(b). (1) Every corporation filing a return under §1.6039-1(b)
shall furnish to each person whose name is set forth in such return
a written statement with respect to the transfer or transfers made
by such person during such year. This statement must include the information
described in §1.6039-1(b)(1).

(2) Each statement required by this paragraph (b) to be furnished
to any person must be furnished to such person on Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan
Under Section 423(c) (or its designated successor) and
be delivered at such time and in such manner as provided in the instructions
thereto.

(3) If the statement required by this paragraph is made by the
authorized transfer agent of the corporation, it is deemed to have
been made by the corporation. The term transfer agent, as used in this section, means any designee authorized to keep
the stock ownership records of a corporation and to record a transfer
of title of the stock of such corporation on behalf of such corporation.

(c) Time for furnishing statements—(1) In general. Each statement required by this section to
be furnished to any person for a calendar year must be furnished to
such person on or before January 31 of the year following the year
for which the statement is required.

(2) Extension of time. An extension of
time to furnish statements required by this section may be granted
in accordance with the guidelines and procedures set forth in the
instructions to Form 3921 and Form 3922.

(d) Penalty. For provisions relating to
the penalty applicable to the failure to furnish a statement under
this section, see section 6722.

(e) Effective/applicability date—(1) In general. This section is effective on November 17,
2009. This section will apply as of January 1, 2007.

(2) Reliance and transition period. Notwithstanding
§1.6039-1(f), corporations must furnish information statements
to employees in accordance with this section for stock transfers that
are subject to §1.6039-1(a) and (b), and occur during the 2007,
2008 and 2009 calendar years. For purposes of furnishing information
statements for stock transfers that occur during the 2007 or 2008
calendar years, taxpayers may rely on §1.6039-1 of the 2004 final
regulations (69 FR 46401) or §1.6039-2 of the 2008 proposed regulations
(REG-103146-08) (73 FR 40999). For purposes of furnishing information
statements for stock transfers that occur during the 2009 calendar
year, taxpayers may rely on §1.6039-1 of the 2004 final regulations
(69 FR 46401), §1.6039-2 of the 2008 proposed regulations (REG-103146-08)
(73 FR 40999), or this section.

Note

(Filed by the Office of the Federal Register on November 16,
2009, 8:45 a.m., and published in the issue of the Federal Register
for November 17, 2009, 74 F.R. 59087)

Drafting Information

The principal authors of these regulations are Thomas Scholz
and Ilya Enkishev, Office of the Division Counsel/Associate Chief
Counsel (Tax Exempt and Government Entities). However, other personnel
from the IRS and Treasury Department participated in their development.